Leeds have been long-term admirers of Gayle, who has a remarkable scoring record at Championship level.
However, Newcastle are only interested in doing a deal, if they can receive a huge fee for the clinical front-man.
Leeds were looking at signing Gayle on a loan deal with a view to making the transfer permanent at the end of the season.
But Newcastle told Leeds they were only interested in doing a deal if there was a clause involved which meant they would have to sign him for £20 million at the end of the term.
Even though there is obvious appeal in bringing in Gayle, Leeds have now walked away from the deal with other transfer targets lined up.
If Leeds could have signed Gayle it may have taken them a step closer to promotion, such is his goalscoring record.
But if disaster had struck, and Leeds failed to go up, being obliged to spend £20 million would have risked the financial security of the club.
And walking away from the deal seems the smart option, unless Newcastle drastically reduce their demands between now and the end of the month.
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